Technically Speaking For February 6

New orders for capital goods (excluding aircraft) and consumer durable goods have been stable for the last 6-8 months.

More commentary regarding a softening German economy is emerging.

The markets continue to make solid upward progress.

The Census Bureau released the latest durable goods data on Monday. Here are three key data sets from that report:Total orders ex-transportation (in blue, left scale) have been moving sideways for the last 6-8 months. The Y/Y percentage change (in red, right scale) has decreased over the last few months but is still a healthy 5%.Non-defense capital goods (in blue, left scale) have also been steady for the last 6-8 months. The Y/Y percentage change (in red, right scale) is 6%. The overall trend is moving lower. New orders for consumer goods (in blue, left scale) have also been moving sideways. The Y/Y percentage change is right below 8%.

Ideally, we'd like to see all three data sets move higher rather than sideways. But sideways isn't fatal; it simply means demand is stable. And on all three charts, the sideways movement is occurring near 5-year highs.

Yet the German economy suddenly looks vulnerable. In the short term it faces a slowdown. It only narrowly avoided a recession at the end of 2018. Temporary factors, such as tighter emissions standards for cars, explain some of the weakness, but there is little sign of a bounceback. Manufacturing output probably fell in January. Businesses are losing confidence. Both the IMF and the finance ministry have slashed growth forecasts for 2019. In the longer term, changing patterns of trade and technology are moving against Germany’s world-beating manufacturers. On February 5th, in response, Peter Altmaier, the economy minister, laid out plans to block unwanted foreign takeovers and to promote national and European champions.

The German economy contracted slightly in the 3Q. The manufacturing PMI has been declining for the last year and currently sits right below 50. Business confidence took a nosedive at the end of last year. And the German equity market is rebounding from a 52-week low:Let's turn to today's performance table:

The markets were modestly lower today, but only fractionally so. The QQQs were the worst performer and they were only off .35%. The DIAs were the top performer and they were down .7%. It's probably best to think of this day as statistical noise more than anything else.

The markets are in the middle of a very nice rally that is characterized by a move higher, consolidation, and then further advance.

The SPYs 5-day chart exemplifies this trend. Prices consolidated in a triangle pattern on the 1st and 2nd of Feb, advanced a few points, and then consolidated in a narrow, 2-point range over the last two trading session. The overall trend -- as shown in the 200-minute EMA -- is higher.

On the SPYs 2-week chart, we have three consolidation patterns, between which there's a modest advance. Again, the overall trend is shown in the 200-minute EMA.

I've also included the IJH's 30-day chart, which shows the overall trend in more detail. It shows that the market is clearly moving higher and is on a sustained upward trajectory.

So -- what to make of where we are? Ultimately, the markets are in a good place. The fundamental picture is solid. While there is weakness in the leading indicators, the coincidental numbers are all positive. Earnings season is progressing fairly well. As a result, the markets continue to make solid upward progress.

Disclosure:I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.